Affordable Homes Programme - Funding Regeneration

Published: July 17th, 2023

7 min read

Following quickly on from the launch of its new five-year strategic plan and the government's budgetary plans, Homes England has announced that Registered Providers of Social Housing (RPs) will for the first time be able to use grant funding provided through the Affordable Homes Programme (AHP) to fund regeneration programmes so long as it forms part of wider programme which is committed to providing new affordable homes.

What is the AHP?

The AHP is a government initiative to boost the construction of affordable new build homes in England. Administered by Homes England, RPs are required to bid for grant funding to support the costs of building affordable homes (and now regenerating current stock). At its core is an aim to provide £7.39 billion of grant funding to contribute towards the cost of building 130,000 new homes (outside of London) by March 2026.

What is Regeneration?

Under the change in policy, strategic partners (i.e RPs who qualify for AHP funding) can now apply AHP funds towards estate regeneration. In the social housing sector, regeneration relates to replacing current stock with better quality homes rather than building new properties.


"Additionality" is a key feature of AHP funding and refers to the additional proportion of units that have been built because of AHP funding. While the change in policy allows for AHP to be spent on regeneration, the notion of "additionality" has been retained. As such, those regeneration projects that do not intend to increase their number of homes will not qualify for AHP funding.

However, Homes England stated that there was no set proportion of "additionally" to qualify for funding and providers have been encouraged to talk to the agency, even if their current proposals did not have it.

When will the change come into effect?

The changes will come into effect immediately. All schemes must, however, start on site by 31st March 2025

Forbes Comment

We welcome the shift in funding strategy which come soon after Homes England's announcement that targets relating to the 2016-2021 AHP have been missed.

As construction costs continue to rise and developers facing issues in relating to supply the supply chain, RPs are seeking innovative solutions to ensure they meet government targets.

For too long RPs have struggled to gain access to funding to replace its properties; regeneration should, in our opinion, be at the core of any policy to reduce the severe shortage of social housing. Enabling an RP to replacement aging stock, which is potentially no longer fit for purpose, should allow the RP to not only meet their targets but improve the quality of houses available to their tenants.

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